AML Policies and Procedures – Top Tips for a Successful AML Review (2024)

Ineffective Auditing can lead to AML Violations

AML compliance requires purposeful and continuous actions daily in order to remain effective. In order to ensure your AML program is compliant, you are required to test and review your AML policies, procedures and processes on a periodical basis.

The failure to determine the adequacy of your AML program has disastrous consequences for regulatory businesses; for example, financial fines, penalties and regulatory involvement which would inflict irreversible damage to your firm’s reputation and credibility.

To avoid such outcomes, compliance with AML regulations needs to be a priority for your organisation.

A comprehensive AML review could help your firm properly identity any deficiencies within your daily anti- money laundering operations. This will enable you to adopt a proactive approach to rectify any key weaknesses so that your AML measures could stand up to any regulatory examination or scrutiny.

AML Regulatory Requirements

The Money Laundering Regulations 2017 stipulates the need for regulatory firms to have adequate policies, procedures and processes in place to prevent money laundering and terrorist financing.

The five main areas include:

• Customer Due Diligence
• Monitoring and Controls
• Disclosure of Suspicious Activities
• Record Keeping
• Training

The regulations also legislate the need for effective internal controls. This includes the requirement to assess the effectiveness of your firms AML program via an independent audit function.

In practice, this means firms are required to perform a money laundering compliance review regularly to ensure that their AML controls and operations are efficient.

Top Tips for a Successful AML Review

1. Define the Goals & Objectives of the Review

Remember that the main goal of a review is to identity any potential weaknesses within your current AML controls in order to ensure your efforts are as robust as possible.

2. Collect Relevant Documentation of your Firms current AML efforts

Relevant documentation may include (but not limited to)

• Your firms AML policy which stipulates your organisations internal AML/CTF procedures – for example your firm’s policy in relation to the disclosure of suspicious activity
• Documentation which shows a record of staff AML training
• Evidence of your firms’ risk-based approach and customer risk assessment procedures
• Evidence of onboarding due diligence and ongoing due diligence procedures
• Your firms risk assessment

3. Assess and Test

Assess your current efforts and ask key questions such as;

• Does staff receive regular training? Is the AML training program you subscribe to up to date with the evolving AML legislation?
• Are findings dealt with in a timely and efficient manner? Is there a backlog in suspicious activity reporting?
• Is the risk assessment thorough? Is it tailored to your business and outlines accurately your unique risk exposure?
• How effective and robust is your AML systems? Are they adequately in line with the latest AML legislation?
• Are your due diligence practices appropriate? Have you distinguished an appropriate procedure for higher risk clients? How effective is your ongoing monitoring and screening of higher-risk customers?

4. Recommendations

Clearly report your findings and make clear, measurable recommendations to improve your internal aml policies, control and procedures.

With these recommendations, create an actionable plan to tackle the deficiencies found.

How can Veriphy help?

As an AML compliance provider, we can offer robust, AML measures to enhance professional compliance and ensure your firm meets all your statutory needs.

With our services we can enhance your AML knowledge, methodology and procedures; helping you build the foundation to an efficient ant-money laundering approach.

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